STAND. COM. REP. NO. 906-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2287
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Energy and Environmental Protection, to
which was referred S.B. No. 2287, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE PUBLIC UTILITIES
     COMMISSION,"

begs leave to report as follows:

     The purpose of this bill is to create a funding mechanism
for the conversion of overhead utility lines to underground
utility lines by:

     (1)  Establishing the Underground Conversion Fund
          (Conversion Fund) to be used for the conversion of
          overhead utility lines to underground facilities;

     (2)  Requiring that an unspecified percentage of moneys in
          excess of $1,000,000 in the Public Utilities Commission
          (PUC) Special Fund (Special Fund) be deposited annually
          into the Conversion Fund;

     (3)  Allowing taxpayers to make voluntary contributions to
          the Conversion Fund through their annual income tax
          returns; and

     (4)  Requiring the PUC to establish criteria allocating
          funds to counties that determine undergrounding zones
          through special improvement districts by ordinance.


 
 
                                 STAND. COM. REP. NO. 906-00
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     Na Leo Pohai, Kauai Renewable Energy Hui, the Sierra Club ,
Kauai Group, and two individuals testified in support of this
bill.  The PUC, Hawaiian Electric Company and its subsidiaries,
Hawaii Electric Light Company and Maui Electric Company, the
Consumer Advocate, and the University of Hawaii's Environmental
Center supported the intent of this measure.  The Tax Foundation
of Hawaii, GTE, Kauai Electric, Life of the Land, and one
individual offered comments.  The Department of Budget and
Finance and the Department of Taxation opposed passage of this
measure.

     Upon further consideration, your Committee has amended this
bill by:

     (1)  Deleting its substance and inserting provisions found
          in Part V of H.B. No. 2843, H.D. 1, which, among other
          things:

          (a)  Establishes the Conversion Fund;

          (b)  Allows the following to be deposited into the
               Conversion Fund:

               (1)  Voluntary contributions by taxpayers on their
                    income tax returns;

               (2)  Voluntary contributions by individuals
                    through amounts paid in excess of a utility
                    bill that is part of a "round-up" program;
                    and

               (3)  Legislative appropriations;

               and

          (c)  Directs the PUC to establish a conversion program
               that allows for the systematic conversion of
               overhead utility lines to underground lines;

     (2)  Requiring that an unspecified percentage of moneys in
          excess of an unspecified amount in the Special Fund at
          the end of each fiscal year be deposited into the
          Conversion Fund; provided that the sum shall be
          calculated prior to the application of section 269-
          33(d), Hawaii Revised Statutes, which lapses moneys in
          excess of $1,000,000 from the Special Fund to the
          credit of the General Fund;


 
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                                 Page 3

 
     (3)  Exempting the Conversion Fund from the requirement that
          five percent of all receipts of all special funds shall
          be deducted to defray the prorated estimate of central
          service expenses of government;

     (4)  Authorizing rather than requiring the PUC to establish
          an annual allocation of revenues from each utility
          having above ground facilities and depositing these
          contributions to the Conversion Fund; and

     (5)  Making technical, nonsubstantive amendments for the
          purpose of clarity.
 
     Your Committee finds that cable companies are not within the
PUC's jurisdiction.  Therefore, as a matter of fairness, any
provision that assesses utilities should also include cable
companies as well.  Your Committee respectfully requests the
Committee on Consumer Protection and Commerce to scrutinize this
inconsistency.

     As affirmed by the record of votes of the members of your
Committee on Energy and Environmental Protection that is attached
to this report, your Committee is in accord with the intent and
purpose of S.B. No. 2287, S.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 2287, S.D. 1, H.D. 1, and be referred to the
Committee on Consumer Protection and Commerce.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Energy and
                                   Environmental Protection,



                                   ______________________________
                                   HERMINA M. MORITA, Chair